Corporate Marketing HealthcareWhite paperCloud Computing in Healthcare:Path to Efficiency and Innovation
2 Cloud Computing in Healthcare: Path to Efficiency and InnovationTable of contents Executive summary2 Executive summary The healthcare industry is in a period of accelerating change3 The potential of cloud that requires continual innovation. The chronic disease – What does cloud offer? epidemic, changing population demographics and advancements in medical technologies are key contributors to4 Taking advantage of cloud technology for agility escalating costs. All stakeholders expect more value for their and efficiency money. And, patients are beginning to play greater roles in – Hospitals and physicians managing their care. Driven by economics, emerging care and – Health plans and insurers business models aligned with personal values and well-being8 Building your cloud strategy are signaling a major shift in how healthcare organizations will compete and operate in the years ahead. At the same9 Change is possible. The tools exist today. time, healthcare organizations, whether they are hospitals, physicians or health insurers, need to lower administrative costs and boost efficiency while increasing business flexibility. A recent CEO Study conducted by IBM revealed that 34 percent of healthcare provider CEOs are focused on simplifying operations to manage complexity more effectively.1 Similarly, 55 percent of healthcare payer CEOs believe that their organizations are ready for the impending complexity. Yet most recognize there is a new environment in which they have to operate.2
Healthcare 3This paper is part of a series that addresses the potential for Costly processes and systems and growing IT complexitycloud computing in the healthcare industry. It explains how threaten to hold organizations back. A more flexible andcloud computing can address key business challenges facing scalable approach to applications and infrastructure can helphealthcare today. It also suggests how organizations can take them support new care delivery and business approaches.advantage of this evolving technology to establish the flexibledigital foundation needed to drive innovation. Cloud computing offers new and flexible ways to provision, manage and pay for technology resources. It can helpThe potential of cloud organizations to address barriers standing in the way ofRegardless of segment, the healthcare industry is facing a adopting new, more efficient business models.multitude of issues (Figure 1). What does cloud offer? Strong need for cost reduction Use data to analyze and improve Cloud computing is a general term for anything that involves clinical and business performance the delivery of technology over the Internet. It is a model for Strong need for operating efficiencies and increased productivity Expand access to care enabling convenient, on-demand network access to a shared Need to automate care delivery Transition from reactive to proactive pool of configurable computing resources (for example, processes and systems care networks, systems, applications and services) that can be Need to modernize legacy Demonstrate greater healthcare value applications and systems to all stakeholders rapidly provisioned and released with minimal management Comply with regulations and security Need for business model innovation effort or service provider interaction.3 It is characterized by: mandates to improve sustainability • On-demand self-serviceFigure 1: Healthcare industry issues • Ever-present network access to computing resources • Rapid and elastic provisioning with minimal management effort or service provider interaction • Pay-per-use
4 Cloud Computing in Healthcare: Path to Efficiency and InnovationCloud computing changes the delivery of IT services in much Healthcare organizations are currently drawn to cloudthe same way that ATMs changed banking, Amazon.com and computing because it can help reduce IT costs and speediTunes have changed the music and entertainment industry and service and infrastructure availability. Although cloudthe Internet transformed commerce. Its overall goal is to computing has been associated more with infrastructure,manage complexity more effectively, using simplification to the ability to generate new business value in terms of processspeed the deployment of new capabilities that can enable innovation and significant cost savings is on the horizon.innovation. Cloud computing provides a platform for business-to-business and business-to-consumer collaboration and can enableFor more information about cloud computing, see the IBM healthcare organizations to focus on differentiating activitiesWhite Paper, “Cloud Computing: Building a New Foundation as distinct from transactional processes.for Healthcare.” Hospitals and physiciansTaking advantage of cloud technology Hospitals and physician practices are experiencing capital and cost constraints and resource shortfalls driven by multiplefor agility and efficiency factors that include inefficient processes and the ITBusinesses have different motivations for using cloud investments needed to support growth, regulatory mandatescomputing (Figure 2). and new approaches to care. The isolated clinical and business processes found in so many hospitals are becoming roadblocks An enabler of business transformation to progress, adding cost and complexity. Increasing system Business- focused • Creating new business models and network service requirements, low utilization of IT • Enabling speed and innovation • Reengineering business process tools and rising operational costs are familiar issues. • Supporting new levels of collaboration Transformation Cloud computing can provide cost-effective ways for hospitals An evolution of information technology and physician practices to expand IT capacity, accelerate IT-focused • Changing the economics of IT deployment of new application environments and promote • Automating service delivery electronic health records (EHRs), while protecting data on • Radically exploiting standardization • Rapidly deploying new capabilities mobile devices, reducing costs and improving clinical and Efficiencies administrative efficiency and productivity.Figure 2: Motivations for cloud
Healthcare 5Hospitals and physician practices need easier ways to capture Business continuity and high availability are increasinglyand store electronic health records and medical images. In the important elements of electronic health record deploymentsUnited States, the American Recovery and Reinvestment Act and regulatory compliance. Cloud-delivered infrastructureprovides financial incentives to organizations that buy and use services can help improve the efficiency of IT processesEHRs, yet it does not cover the full cost for many providers. such as IT help desks and data backup and meet regulatoryCloud-delivered approaches help solve this problem. Cloud requirements for medical records retention. At the same time,can help deploy EHRs more quickly. With cloud, EHR they provide scalable compute and development environmentspayments can be made over time so that no big, upfront capital for compute-intensive research projects like those conductedinvestments are needed. Doctors can focus on patient care by academic medical centers.while their cloud services provider manages the technologybehind delivery. IBM’s security and risk solutions can help build secure clouds and deliver security services from the IBM cloud. For example,Cloud offers the opportunity to expand IT capacity quickly healthcare organizations can implement a private storage cloudwithout major outlays. One example is storage capacity. A and use IBM Information Protection Services – Managedmodest 100-bed hospital will generate approximately 60 GB Backup Cloud to deliver it securely.of new digital content per bed per year, requiring at least anadditional 6 TB of storage space annually. Cloud-delivered Cloud computing can further help hospitals and physiciansIT resources can help address the need for economical storage accelerate deployment of new applications or expand ITexpansion, eliminating the need to continue buying and infrastructure capabilities to accommodate sudden businesssupporting in-house storage systems, lowering costs and growth and change. In fact, a recent IBM-sponsored surveyhelping with storage management. shows IT professionals predicting that mobile and cloud computing will emerge as the most in-demand platforms for software application development and IT delivery over the next five years.4 For many organizations, cloud computing offers new capabilities that don’t require the IT staff historically needed to service and maintain infrastructure. By eliminating the upfront expense and headaches associated with infrastructure growth and maintenance, IT staffs are free to adopt new technologies that support strategic business projects such as EHRs.
6 Cloud Computing in Healthcare: Path to Efficiency and InnovationMobility is critical to providing health services at the point of Desktop virtualization from the cloud can improve efficiencycare, in the patient room, the skilled nursing facility or even at and provide anytime, anywhere access to healthcarehome. The benefits of optimized mobility solutions can be applications, information and resources without the addedboth financial and clinical. Of course, unmanaged mobility in burden of adding staff for system management. Movinghealthcare has risks, because mobile devices loaded with applications from desktops into a centralized, hostedsensitive patient data can be lost or stolen. Competent device environment can lead to better accessibility, manageabilitymanagement is critical to success. Cloud-based approaches can and security. IBM’s desktop virtualization solutions can helpenable safe and secure mobile access, improved workflow, more organizations quickly scale their IT infrastructures and boostsatisfied staff and better care, all while securing sensitive data. information accessibility, improving workflow, data accessWith cloud-based storage, data is never stored on mobile and satisfaction, while reducing complexity, energydevices, eliminating the chance that protected health consumption and cost.information (PHI) will be compromised on a user device. Cloud-delivered approaches can also improve staff productivity by helping automate, streamline and manage simple administrative processes. University College London Hospitals NHS Foundation Trust (UCLH), one of the largest NHS (National Health Service) trusts in the UK, elected to use business process management (BPM) capabilities from IBM WebSphere® Lombardi® Edition to develop a comprehensive Patient Tracking System (PTS). The BPM- based PTS enables UCLH to model patient pathways andA large medical school deployed a private cloud from IBM to link directly to those core IT systems that hold informationcentralize management of desktops used by investigators using about patient appointments, diagnostic tests and treatmentan enterprise-class data center rather than at user stations,gaining greater control of application configurations and so that when treatment is first administered, whetherincreased controls over PHI data. therapeutic or a period of advised observation, this is all noted and managed.
Healthcare 7In short, hospitals and physician practices are feeling the Cloud-delivered capabilities can help to improve health planpressure to extract greater value from limited financial, and health insurer business process efficiency. IBM Blueworkshuman and IT resources. Cloud-delivered capabilities can Live is a cloud-based business process management tool usedmake it possible to use only the resources necessary to to discover, design, automate and manage business processes.support administrative and IT operations at any given With capabilities that allow a business person with littlemoment. This flexibility translates into reduced costs, better technical skill to automate processes, it can result in moreefficiency and productivity and increased ability to focus control and improved productivity using a social, collaborativeon differentiating initiatives. approach. It is an effective tool for building new approaches to customer service.Health plans and health insurersHealth plans and insurers are struggling with inefficient Improving customer service is a priority for many healthadministrative processes, inflexible systems, increasing plans and insurers, who might relate to the experience of amedical costs, new business models like Patient Centered prominent call center client. This client expanded its cloudMedical Home and a steady stream of regulatory changes computing initiative, which has already reduced the company’sthat require significant investments to implement. Nine out desktop PC operating costs by 50 percent. Benefits canof 10 healthcare payer CEOs believe the environment will go beyond operational expense reduction to improvebe more difficult over the next five years, further complicating service quality.how they will manage and thrive.5 Cloud-delivered approaches can increase business flexibility by expanding IT capacity and resources at lower cost and, in many cases, providing superior service quality. While initiatives to modernize core claims systems have historically been viewed as expensive with limited ROI, cloud-delivered infrastructure services can facilitate and accelerate claims systems migration and modernization projects, enabling faster time to value and improving return on investment.
8 Cloud Computing in Healthcare: Path to Efficiency and InnovationIBM Smart Business Development and Test Cloud provides asecurity-rich, standardized test and development environmentthat helps reduce test cycle times, complexity and risks. Thiscapability could accelerate transition to ICD-10. Benefitsinclude a possible reduction of capital and licensing expensesby as much as 50 to 75 percent, using virtualized resources.By automating development and test resource configurations,health plans and health insurers have an opportunity to reduce Healthcare collaboration in the cloudoperating and labor costs as much as 30 to 50 percent.6 Hospitals, physicians, health plans and health insurers can takeLike hospitals, health plans and insurers can also take advantage of cloud-based collaboration tools. IBM LotusLive™advantage of cloud-delivered storage capacity to house their provides cloud-delivered business services that help peopleburgeoning information stores. Cloud-delivered infrastructure connect and collaborate beyond the boundaries of their ownservices such as managed backup services can help improve organizations. A multinational medical supply company inIT backup efficiency and meet regulatory requirements for Switzerland is using LotusLive as a collaboration hub and todata retention. Software services in IBM Tivoli® Live - service track project tasks for the effort to fight malaria in sub-Saharanmanager7 can enable better automation and control of IT Africa. A drug inventory monitoring solution captures currentservice desk functions – functions that are critical to stock levels of combination therapy and quinine drugs. Drug suppliers, state officials and other logistics organizations canmaintaining business operations. then access these records, using a tabular, web-based interface that maps existing supplies to geographic locations. The LotusLive solution enables comprehensive, inexpensive weekly reporting for every medical facility in a district and promotes improved malaria epidemic detection.
Healthcare 9Building your cloud strategyThe successful infusion of cloud into your business strategy,including focused pilots, can accelerate IT cost reduction andspeed service and infrastructure availability. In our experience,the best cloud strategies are workload-driven. Figure 3 showsexamples of workloads that can be moved to the cloud to helpreduce capital expenditures, operational costs and risk and toproduce better quality of service and increased agility. IBM Research demonstrates private test cloud cost savings IBM Research has studied the cost savings of private test Process Automation and clouds by analyzing comparable application testing services. Optimization One used a private test cloud and other used the current Secure Mobile Desktops application testing IT environment. Both environments had and Devices the same level of IT support for both environments. They Efficient PC Refresh Cycle discovered: IT Service Help Desk • Hardware savings of 65 percent from reduced infrastructure Long-term Data Archival and improved hardware utilization Development and Test • Software savings of 27 percent from lower license costs Environments and improved utilization Business Continuity and • System administration savings of 45 percent from reduced Disaster Recovery system administration and operation costs Security • Provisioning savings of 76 percent from labor savings in Capacity for service request management Compute-intensive Research Compute and Storage for Peak Demands Legacy Modernization IT SimplificationFigure 2: Workload examples
10 Cloud Computing in Healthcare: Path to Efficiency and InnovationChange is possible. The tools exist todayIBM can help you assess and plan cloud adoption. We canhelp develop business and care delivery strategies, extendIT optimization strategies and build a roadmap. Our roadmapmethodology can help you understand not only which cloudstrategy meets your needs but also which service is best suitedfor delivering specific clinical and business use cases.In realizing lower operational costs, increased agility and What IBM offers healthcare organizationsfaster time to market by using cloud computing, healthcare • Clear economic value. IBM helps you work through the rightorganizations can dedicate more focus on initiatives leading mix of delivery models and choices to reap the maximumto healthcare innovation. benefit. An innovative healthcare organization shared lessons gained from an IBM CloudBurst™ (infrastructure as a service) implementation that introduced a pay-as-you-go model to increase project flexibility and allocate freed up resources to other high-value activities. The investment in cloud computing required creativity and a strong commitment to realize benefits. • Integrated and open solutions. IBM actively supports healthcare standards development, working with policy makers, building consensus and delivering unique, innovative new technologies. IBM initiated a community-based effort to drive new standards for cloud computing. Our open standards approach encourages a broader ecosystem, including developers, independent software vendors and resellers, which can lead to collaborative partnerships that will be critical to the deployment and success of healthcare cloud platforms. • Secure solutions that are ready for business. The IBM Security Framework and Blueprint provide a comprehensive method for addressing all aspects of security and an equally comprehensive portfolio of security offerings and services. IBM is working to implement secure delivery models, deploying platforms for industry clouds that are “secure by design” so that when healthcare organizations or communications services providers deliver services, they can trust that their services are not compromised. In addition, IBM Research is helping clients navigate and manage the cloud security landscape. • Designing for simplicity. From sourcing to usage to maintenance, IBM cloud solutions are simple, intuitive and designed for how healthcare organizations actually work. • Globally relevant. We’ve established 11 global cloud computing laboratories to help local organizations, governments and research institutions design, adopt and reap the benefits of cloud technologies. Each lab serves as a gateway for local clients to tap into the knowledge of IBM software, services and research labs around the world.